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financial system and the implications for investment analysis and risk sharing. First, we show that African stock markets are not well integrated with each other, raising important questions about the quest for a pan-African exchange. Second, we find weak stochastic trends between African markets and the rest of the world, indicating that Africa’s markets tend to respond to local rather than global information. Although the weak trends uncovered present an opportunity to diversify portfolio into African markets, we argue that risk perception and institutional underdevelopment remain obstacles to the development of Africa’s emerging equity markets. Thus lessening political and economic policy risk, and / or reducing existing barriers to movement of financial resources are sine qua non to integration and deepening of Africa’s capital markets.